Oct 22, 2009 8:34 pm US/Central
Insurers Use 'Trigger List' To Deny Medical Plans
Or, People With Pre-Existing Conditions Could Get Charged Much Higher Rates
CHICAGO (CBS) ―
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John Ainsworth knows firsthand how health insurance companies deny policies to applicants with pre-existing conditions.
CBS
There's an inside secret among insurance companies.
Many of us don't know anything about it, but it's the reason why many people who apply for health coverage are denied. 2 Investigator Pam Zekman discovered the secret while investigating why so many people are falling through the cracks.
John Ainsworth is familiar with what can happen to people who apply for health insurance. "I know firsthand why the system has to be overhauled," he said.
Both John and his wife had diabetes when they applied for health insurance, and the company asked about it.
"And that was it -- we couldn't buy a health insurance policy," John said.
Just paying for his medications was prohibitive – more than $1,000 a month.
For a time he got his prescriptions filled for free at Cook County's hospital, in effect passing the burden on to county taxpayers.
"We weren't indigent, we just couldn't afford to pay the full-fare price at the hospital or doctor," John said.
His case is not unusual, The CBS2 Investigators obtained a copy of the "Trigger Diagnosis List." If you have any of the 93 diseases on this list, it could trigger a denial of coverage.
Professor David Dranove of the Kellogg School of Management explains why this happens: "What the insurance company is trying to do is making sure they're not signing up somebody who is going to immediately run up medical bills for $20,000; $30,000; $50,000."
Even if you can get health insurance with a pre-existing condition, you better be ready to pay plenty.
That's what happened to Edwin Harrison, an accountant who survived colon cancer 15 years ago.
He wound up with coverage that cost $850 a month in premiums; it had a $20,000 family deductible.
"That's not per year -- that's per occurrence," Harrison said. "But when you have pre-existing conditions, sometimes that's the only types of policy that are available to you."
Professor Dranove questions the value of such a policy. "This is almost like not having insurance at all," he said. "This could wipe out somebody's savings."
To prevent that, reform proposals pending in Washington would cap the amount that can be charged for premiums and deductibles and provide subsidies to help lower-income people pay for them. All of the proposals prohibit insurance companies from denying coverage to anyone with a pre-existing condition.
Whatever you do, Dranove warns, don't intentionally leave out a pre-existing condition when applying for insurance because you could wind up being responsible for 100 percent of the cost of your medical bills.
The good news for John Ainsworth is that he has found a job and is fully covered now.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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